What Factors Affect Credit?

Credit is important, but what factors affect credit scores? There are a lot of myths about how credit scores work and what will help or hurt your credit. This page lists a number of the most confusing items that readers ask about. For some of these questions, the answer is "it depends" because your credit might be affected indirectly (even thought the item isn't explicitly part of a credit scoring calculation).

What do we Know About Credit?

For the best credit scores, you need to show a rich history of responsibly using credit. Lenders want you to be a seasoned borrower who always pays on time. For the basics on what credit is, what it isn't, and how it works, see:

These pages mostly cover mainstream credit scoring and reporting (such as the FICO score, the most commonly used score for major loans like home purchases and car loans). However, there are alternative scoring systems out there, and those scores may view things differently. In general, you might say that FICO scores look at how you've borrowed in the past, while alternative scores evaluate how you've paid bills in the past. Going forward, how you use social media might become a factor.

Be aware that credit scoring models are complex and top-secret. Therefore, it’s impossible to know exactly which factors affect credit scores and how much of an impact they have.

That said, FICO has shared enough guidance to help borrowers understand what is most important for a solid credit score.

Frequently Asked Questions About What Affects Credit

Here are some of the most frequently asked questions about your individual circumstances and credit scores:

  1. Does Marriage Affect Credit?
  1. Do Bounced Checks Affect Credit?
  2. Do Utility Payments Affect Credit?
  3. Does Foreclosure Affect Credit?
  4. Does Income Affect Credit?
  5. Do New Loans Affect Credit?
  6. Does Co-Signing Affect Credit?
  7. Do Debit Cards Affect Credit?
  8. Does Refinancing Affect Credit?